WASHINGTON, Oct 27 U.S. federal regulators have
closed an investigation into Google Inc's (GOOG.O) "Street View"
maps service, saying the company has taken steps to address
privacy concerns raised by its improper collection of emails and
other personal information.

The Federal Trade Commission said in a letter to Google on
Wednesday that it was ending its probe with no penalties, a
victory for the world's largest Internet company, though it still
faces multiple privacy challenges abroad as well as from more than
30 U.S. state prosecutors.

Just this week, British regulators announced plans to make
further inquiries and to consider whether to use enforcement
powers after Google admitted that the WiFi-equipped vehicles it
sends to take photographs for Google Maps had inadvertently also
grabbed emails and passwords.

Britain's Information Commissioner's Office had said in August
that it believed Google's cars were unlikely to have captured
significant amounts of personal data.

But the FTC commended Google for building consumer privacy
into its corporate structure, such as by appointing a director of
privacy for engineering and product management, training key
employees on privacy, and building a formal privacy review into
the early phases of new initiatives.

"Because of these commitments, we are ending our inquiry into
this matter at this time," David Vladek, director of the FTC's
Bureau of Consumer Protection, wrote in the letter.

Regulators around the world have been increasingly vocal about
protecting consumer privacy on the Internet at a time when
companies from Google to Microsoft (MSFT.O) to Facebook are
collecting vast amounts of information about consumers' online
habits and using the data to help marketers target their ads.

Besides Britain and Italy, regulators in France, Germany,
Spain and Canada have opened investigations into Google's Street
Views cars, which crisscross the globe to take panoramic pictures
of city streets.

While these probes have not had much of an impact on Google's
shares, which edged lower on Wednesday along with the broader
market, they are a distraction for a company and can hurt public
perception of its business ethics.

Google acknowledged last Friday that its Street View cars had
inadvertently collected more personal data than previously
disclosed. But Google assured the FTC that it had not used and
would not use the collected data in any product, the FTC said.

Colin Gillis of BGC Partners Inc said the FTC decision was
nothing more than "one less hassle" for Google.

"I would say one less issue, but the issues seem to be
growing," he said, noting the increased scrutiny that Google is
receiving as it tries to make acquisitions to diversify its
business beyond Internet search.

"I think the broader point is that Google with its position in
our lives is going to continue to be a target and also under
scrutiny (by regulators)," said Gillis.

INCREASED PRIVACY OVERSIGHTS

Connecticut Attorney General Richard Blumenthal, who leads a
coalition of more than 30 states, said their investigation into
Google's alleged invasion of privacy continues despite the FTC
decision on Wednesday.

"Google's alarming admission last week -- confirming it
collected entire emails and passwords -- only heightened our
concerns about how and why this data was collected," he said in a
statement.

Google disclosed in May that its Street View cars collected
data from unsecured wireless networks used by residents in more
than 30 countries.

Google apparently had planned to only collect a limited type
of WiFi data relating to the WiFi network's name and router
numbers. Google has said that its Street View cars no longer
collect any type of wireless information.

On Wednesday, Google said it welcomed the FTC decision. "As
we've said before and as we've assured the FTC, we did not want
and have never used the payload data in any of our products or
services," a Google spokesperson said in an emailed statement.

Joseph Turow, who teaches at the University of Pennsylvania's
Annenberg School for Communication, said the data collection
showed that someone else could scrape up the same information for
malicious reasons.

"I think that this will be seen as another one of the steps
along the way that expose the tenuousness of security," he said.
"I never thought that this was anything more than Google screwing
up but the implications are pretty heavy."
(Reporting by Diane Bartz; Editing by Lisa Von Ahn, Gerald E.
McCormick, Richard Chang, Phil Berlowitz)

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